eThekwini municipality fighting off nearly 2,500 legal claims

The embattled eThekwini municipality says a rates boycott, numerous legal challenges and miscommunication that it had been placed under administration were huge setbacks. 

In a KwaZulu-Natal engagement with the national executive committee of the South African Local Government Association (Salga) in Durban on Thursday, the municipality said miscommunication about the type of intervention made by the provincial government “startled” creditors and resulted in the city being downgraded.

The city said contrary to media reports, the provincial government intervention was that of Section 154 support which was communicated as if it meant the city would be placed under administration.

“That sent shock waves to creditors, investors and ratepayers.”

The result was the municipality being downgraded by credit ratings agencies on May 30, as per the city’s report presented before the Salga national executive committee on Thursday.

Detailing the source of the confusion, speaker Thabani Nyawose said the KwaZulu-Natal government did not clarify the issue to the public.

“The cabinet of KwaZulu-Natal took a decision to put our municipality under Section 154 but in its implementation we discovered it was Section 139 in the way it was coined or crafted. We then challenged the cabinet and in our engagement, it was discovered our argument was correct and those decisions were withdrawn. The cabinet of KwaZulu-Natal never came back to the public and the media to address the issue.”

Another challenge has been the rates boycott from July by some ratepayers after disagreements about proposed tariff increases.

After discussions between municipal leaders and ratepayer groups, the city resorted to disconnecting the households that had withheld their rates payments, resulting in an unsuccessful court appeal by the ratepayers.

Municipal manager Musa Mbhele said ratepayers had been “shifting” the source of their grievances from complaining about the bills not being “readable” to complaining about the quality of service they were receiving.

“They lost that appeal for immediate relief and we are still disconnecting. We’re not happy about it but we have to implement our credit control policy.”

The city’s report said its collection rate had improved to 100.72% from 92.3% in July with 72 days' cash on hand.

Mbhele suggested that might be due to the city starting the disconnections.

“We are collecting more than what we used to collect prior to effecting disconnections, which shows this rate boycott thing does not get the traction some people behind it thought they were going to get.”

The main application to interdict the city from disconnecting is set for November 1.

There are 2,489 pending matters of litigation against the municipality, most of which are claims for collisions with council vehicles, alleged unlawful arrests and detention.

Mbhele also asked Salga for support with debt recovery from government departments.

“Of R25bn we are owed, a large part comes from government departments. When we start cutting things and exams are not written there is pressure.”

They also asked for Salga’s support in advising the provincial government on how to deal with metros.

Mbhele said metros were meant to be managed by National Treasury but the KwaZulu-Natal government was acting as if it was controlling eThekwini.

“We love the provincial government and would like them to support us but they sometimes treat us like a municipality they have full control over. We are saying we need to get clarity on this thing of being a non-delegated municipality and the promulgation as such by National Treasury.”

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